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Published by fmsdesign, 2018-07-09 09:58:17

FMS Research: What a Difference a Year Makes: 2017 v. 2018

July 2018
Community Mindset: Bank and Credit Union Leadership Viewpoints 2018
WHAT A DIFFERENCE A YEAR MAKES: 2017 v. 2018
For the second consecutive year, FMS surveyed 400 senior executives from community banks and credit unions to get their thoughts on the most imposing challenges and the top strategic priorities facing their institutions. And while much of the momentum in certain areas has remained relatively steady from 2017 to 2018, several of the similarities and differences between the two years reflect the rapid evolution of the industry and the steps institutions are taking to remain competitive.
FACTORS FOR GROWTH
Out of ten factors for growth, technological innovation continued to reign supreme as the most important from 2017 to 2018. However, many of the factors at the bottom of the list in 2017 – such as branches – are being taken more seriously in 2018.
75%
Technological innovation
The top priority for two years running
M&A MOVEMENT
75%
Attracting and retaining talent
Mere percentage points behind, this factor is up from 4th place in 2017
62%
Adding branches
While still in last place, this growth factor saw a meteoric rise of 15 percentage point
M&A seems to be heating up in 2018, as more institutions see themselves as prospective acquirers than in 2017, and fewer appear content to sit on the sidelines.
10% 20%
30%
24%
7%
40%
30%
Not interested Prospective buyer Prospective seller Considering a move
41%
2017
2018
CHANGING PRIORITIES


HOLDING STEADY
GLASS HALF FULL
Similar to 2017, the overall mood in 2018 remains upbeat, with bank and credit union leaders generally liking what they’re seeing.
Respondents who 19% describe their outlook
CHALLENGES
62%
58%
58%
60%
70%
2017
65% 65%
2018
Regulatory burden
Competition
Attracting new customers
REGULATORY REVERSAL
17%
for the industry as either very or somewhat optimistic
The top three perceived challenges from 2017 have remained at the top of the list with remarkably similar percentages in 2018, though regulatory burden dropped from the top spot this year as relief efforts on several fronts seem to be taking hold.
80 70 60 50 40 30 20 10
0
2017 2018
54% 55%
The regulatory outlook is far sunnier this year than last. More respondents are finding their regulatory burden manageable in 2018, with fewer seeing it as particularly heavy or overwhelming.
53%
34%
21%
2017 2018
14%
8%
Reasonable
A little too heavy
Overwhelming
71%


TOP TECH
Technological priorities are being taken more seriously in 2018, with every option seeing a bump from 2017. Though improving efficiency and stressing fraud and risk management remain at the top of the list, other priorities saw the biggest increases.
79%
Adding new systems
or capabilities
Up ten percentage points from 2017, more institutions are adding to their existing services
MOBILE ON THE MOVE
76%
Improving infrastructure or core upgrades 11% more respondents are focusing or shoring up their tech foundations in 2018
67%
Pursuing fintech partnerships
The if-you-can’t-beat-them- try-to-join-them approach to
fintech competitors saw an 18% increase from 2017
Online banking is so 2017. In 2018, bank and credit union executives say mobile banking and mobile bill payments have knocked online options off their pedestal.
41%
29%
30%
23%
2017 2018
8%11%
Mobile bill pay
Online banking
Mobile banking
17%
12%
Online bill pay
TECHNOLOGICAL TURNS


BRANCH REVIVAL?
While the dominant themes regarding branches in 2018 were largely unchanged from the year before, there was a slight increase in the number of respondents who were happy with their network or were looking to add branches, and a slight decrease in those planning to close branches.
38% adding branches, 15% closing branches, 48% holding steady, up from 36% in 2017 down from 18% in 2017 up from 46% in 2017
UPCOMING UPGRADES
2018 is the year for branch redesign! More than a third of respondents in 2018 are considering the benefits of four out of five potential branch upgrades – higher in each category than in 2017.
41%
36%
40% 40%
2017 32% 2018
24%
33%
34%
Added features
Physical Interactive redesign tellers
Universal tellers
FMSinc.org/Research
BRANCH NETWORK NOTIONS


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